Welcome foreign buyers

As is obvious, this is ridiculous reasoning. Nobody prefers profits to hunger. Moreover, there are already tens of thousands of Australian investors who own farm land for non-commercial reasons. Individually their investments might be small, but collectively they are many times bigger than either the current or proposed FIRB threshold. Our capital markets and trade are quite unconcerned by them, yet logically the committee should be demanding a national interest test for them too.

Perhaps more to the point, the price of farm land would be substantially lower but for these investors. Demand for non-commercial hobby farms and lifestyle investments has been propping up farm prices for years.

In any case, the thought that wheat, beef, lamb, potatoes or onions grown on a farm owned by Hassad might be exported at less than market prices is hardly something to get bothered about. Australia's biggest grain grower, Ron Greentree, can sell all his wheat to Egypt at a 90% discount any time he likes. That would annoy Egypt's usual suppliers, slash his tax bill and might cause a blip in prices, but it's hardly the end of the world. And he would still have paid market prices to grow and ship the wheat.

The fact is, the Senate committee was jumping at shadows. That a few other countries have tightened restrictions on foreign investment in agriculture, which the committee seemed to think was relevant, is no reason for Australia to do it. Indeed, it probably gives us more reason not to.

Foreign investment does not disrupt either markets or trade. For those who would like to sell their properties and have some money left over after paying off the banks, or who want to borrow against their property, it is to be especially welcomed. More buyers mean higher prices.

This article first appeared on Farmonline.